Life insurance glossary

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A

Acceptance date

The date your application for an insurance policy is accepted and your cover starts, as set out in your policy schedule. 

Accident

An unexpected event resulting in bodily injury, where the injury is caused by accidental, violent, external and visible means, and where the injury is not self-inflicted.

Accidental death

Death as a direct result of an accident (and within 90 days of the accident occurring).

Accidental injury/serious injury cover

A lump sum benefit paid to the life insured if – while your cover is active – if you suffer from permanent loss of sight, permanent loss of the use of your limbs, or paralysis.

Activities of daily living 

The ability to independently perform defined essential domestic tasks; specifically: eating, bathing, dressing, going to the toilet, and getting in and out of bed and a chair. See also loss of independent living.

Australian resident

A person who resides in Australia and:

• holds Australian or New Zealand citizenship; or

• holds an Australian permanent residency visa; or

• is eligible to apply for an Australian permanent residency visa and will submit an application within the next 12 months.

B

Beneficiary

The nominated person who will receive your life insurance benefits in the event you pass away.

Benefit amount

The amount you apply for (and which is accepted by us) in respect of each life insured.

Benefit payment

This is the actual payment from us to you (or your beneficiary) in the event of an approved claim.

C

Claim

A formal request by you as the policyholder for benefits for a covered loss or policy event.

Commencement date

The date your first premium is deducted, as set out in your policy schedule.

Cooling-off Period

The 30-day period from the commencement date of a Medibank Life or Funeral insurance policy that a customer has to review and make sure they are happy with it. If a customer changes their mind and cancels their policy during this period, Medibank will provide a full premium refund, provided no claims have been made.

Cover

The type of insurance and the circumstances in which a benefit amount is payable, as set out in your Product Disclosure Statement and policy schedule.

D

Death benefit

The benefit amount payable in the event you pass away as set out in the policy schedule.  See also Life benefit amount.

Domestic duties

Refers to common  tasks including: cleaning, cooking, laundry, shopping, and taking care of dependants.

Duty to take reasonable care not to make a misrepresentation

An obligation called the 'duty to take reasonable care not to make a misrepresentation' applies to new policies and amendments to existing policies. This is your legal duty to answer and provide information to the insurer that is truthful, accurate and complete. If you don't, it can impact you cover in a number of ways such as your contract being voided, a claim being declined or a benefit payment being reduced. 

Disability/Disabled

Generally, disability or disabled is specific to Income Protection, Permanently Unable to Work or Totally and Permanently Disabled Cover and refers to the inability and the circumstances under which you are unable to work due to a sickness or injury.

E

Employment status

The state and conditions of your employment or self-employment, if any e.g. part-time, permanent or unemployed. 

Exclusion

An event or condition that is not covered under the terms of the policy and we won’t pay benefits towards. Exclusions are set out in your Product Disclosure Statement and policy schedule.

Expiry date

The time when your insurance policy expires and you are no longer covered as set out in your policy schedule.

F

Financial Advisor

An advisor who is an Australian Financial Services licensee, who is authorised to provide personal advice to consumers in relation to financial products and services.

Financial Hardship

Circumstances which may make it difficult for you to pay your insurance premiums.

Funeral expenses

Costs incurred for the arrangement of a funeral, including burial or cremation fees.

Funeral insurance

A lump sum benefit to help your loved ones manage expenses in the event you pass away.

G

Guaranteed application acceptance

If you’re an Australian resident aged between 45 and 79, Medibank guarantees to accept your application for funeral insurance. 

Guaranteed lifetime renewal

The promise that, even as your circumstances change, your Medibank life insurance policy will renew each year provided premiums are paid until your policy or cover expires as set out in your policy document.

I

Income benefit

The amount of your ongoing monthly benefit payments under an income protection policy, which are a percentage of your regular income.

Income protection insurance

A policy  that provides an income benefit as a percentage of your regular income in the event you can’t work due to serious illness or injury.

Income/Pre-tax income

Your regular pre-tax, monthly earnings, as defined in an income protection policy.

Insurance Policy

The legal contract between you as the policy owner and the insurer, made up of: the Product Disclosure Statement, your policy schedule, and any special conditions, amendments or endorsements we issue to you.

Insured event

An event covered by your policy, meaning the insurer can pay a benefit/s for it.

Insurer

The provider of a life insurance product, with whom your life insurance policy is agreed.

L

Lapse

The end of insurance cover due to premiums not being paid, as outlined in your Product Disclosure Statement.

Level premium

A type of life insurance premium which can stay at the same amount or, depending on the policy, can increase each year based on indexation rather than your age.

Life benefit amount

The benefit amount payable in respect of life cover, as set out in your policy schedule. See Death benefit.

Life insurance

A lump sum payment if you pass away, or if you’re diagnosed with a terminal illness. The amount of life cover you can choose may depend on your age, income and your eligibility at time of application.

Life Insurance Code of Practice

The life insurance industry’s commitment to customer service standards. It’s designed to protect customers and helps lift industry standards in order to deliver better customer outcomes. A copy of the Life Insurance Code of Practice can be found here.

Life insured

A person(s) who is covered by the insurance policy and whose circumstances the insurer will assess and accept, and who is named in the policy schedule. See also Partner/Joint policy

Life stage/Major life event

A phase of life defined by major events (such as buying a house, getting married or starting a family) and which might prompt you to evaluate your insurance needs. Some insurance policies may also provide an increase in cover without underwriting when certain life stage events occur.

Loading

An increase in premiums due to a higher likelihood of a claimable event occurring.

Loss of Independent living

The permanent loss, due to sickness or injury, of the ability to perform a specified number of activities of daily living. These are generally defined as eating, going to the toilet, bathing, dressing, and getting in and out of bed and a chair.

Lump sum benefits

A one-off payment for an accepted insurance claim, as opposed to an ongoing payment.

M

Medibank member

A Medibank Private Health Insurance customer, either on their own policy or listed on someone else’s policy.

Medical history

Comprehensive health information about any past or known medical conditions such as allergies, illnesses, surgeries, immunisations, diagnoses, or family illnesses

Monthly benefit

The amount you are insured for under income protection insurance which may be paid each month upon a successful claim as shown on your policy schedule.

N

Non-disclosure

The failure to disclose all relevant information to us as required during an insurance application, which can result in your policy being voided. See also duty to take reasonable care not to make a misrepresentation.

O

Occupation

The job or profession in which you are usually employed.

Ongoing payment

A regular payment for an accepted insurance claim which may continue for a period of time, as opposed to a lump sum benefit.

P

Partner/Joint policy

Some policies allow for multiple lives to be insured under the same policy such as a husband or wife. See also Life insured.

Payout

The payment of benefits from the insurer in the event of an approved claim.

Permanent inability to work/ Permanently unable to work/Total and Permanent Disability

The inability to work due to sickness or injury, resulting in a total absence from work for a consecutive period of time, and where your condition is unlikely to improve and you will be unlikely to ever be able to work again.

Policy anniversary

The annual anniversary date of a policy commencing.

Policy schedule

The document we send you setting out the details of your insurance policy, including any special conditions, amendments, or endorsements. This is one of the documents that forms part of your Insurance Policy.

Policyholder/Policyowner

The owner of the policy, as shown in the policy schedule.

Power of Attorney

A legal document which allows one person to give legal authority to another person so they can act on their behalf.

Pre-disability income

Under Income Protection Insurance, your pre-disability income is generally your income for a defined period immediately before you become disabled.

Pre-existing condition

A medical condition that existed at any time prior to the day on which the person became insured under the policy or changed their cover.

Premium

An amount of money that must be paid for your insurance policy to maintain cover.

Premium Waiver

A policy feature or financial hardship option whereby your regular premiums are waived for a period of time.

Product Disclosure Statement (PDS)

The document which details all the terms and conditions of life insurance covers. This is one of the documents that forms part of your Insurance Policy.

R

Recurrent disability

Under Income Protection policies, a disability which results from the same cause as a prior disability, or from a related cause.

S

Sickness

An illness or disease which first occurs while your policy is active.

T

Term life insurance

A policy which provides cover for a defined period and which pays a benefit upon death or diagnosis of a terminal illness.

Terminal Illness

A confirmed diagnosis by a specialised medical practitioner of an illness where life expectancy is a defined period.

Terminal illness benefit

The benefit payable in respect of diagnosis of a terminal illness, as set out in the policy schedule.

Trauma benefit amount

The benefit amount payable in respect of trauma cover, as set out in the policy schedule.

Trauma Cover

A lump sum benefit if you suffer a specified medical condition as defined in the Product Disclosure Statement.

U

Underinsurance

Insufficient insurance coverage to cover your expenses and financial commitments. 

W

Waiting period

Under Income Protection Insurance, the period of time for which you must be disabled before you are entitled to receive an Income Benefit.

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